MEMPHIS,
Tenn., Oct. 31, 2024 /PRNewswire/
-- International Paper (NYSE: IP) today reported third quarter
2024 financial results.
THIRD QUARTER 2024 HIGHLIGHTS
- Third quarter net earnings of $150 million ($0.42
per diluted share)
- Third quarter adjusted operating earnings (non-GAAP)
of $153 million ($0.44 per diluted share)
- Third quarter cash provided by operations of
$521 million and returned
$161 million to shareholders in
dividends
"Our third quarter earnings are above our outlook," said
Chairman and CEO Andy
Silvernail. "Higher prices across the portfolio, including
benefits from our packaging go-to-market strategy were supported by
a moderately improving box demand environment. We also had higher
operating costs and lower volumes due to seasonality and commercial
actions to improve profitability."
"Going forward, we are laser-focused on delivering profitable
growth as the low-cost, most reliable and innovative sustainable
packaging solutions provider for our customers. We are deploying an
80/20 approach to strategically align resources to become excellent
with our customers, while reducing complexity and cost across the
company. This includes organizational restructuring and corporate
cost reductions, as well as investments to strengthen our most
competitive and strategic assets, paired with facility closures to
structurally reduce operating costs. In addition, we are exploring
strategic options for our Global Cellulose Fibers business. We
recognize the impact of these difficult decisions and are providing
support for team members who are affected," Silvernail added. "As
we look forward to the combination with DS Smith, we expect the
transaction will close early in the first quarter of 2025. Overall,
I'm confident that our transformational journey will unlock
substantial value at IP and strengthen the company for our
employees, customers and shareholders."
|
Diluted Net EPS and
Adjusted Operating EPS
|
|
|
|
|
|
Third
Quarter
2024
|
|
Second
Quarter
2024
|
|
Third
Quarter
2023
|
|
|
Net Earnings (Loss) Per
Share
|
|
$
0.42
|
|
$
1.41
|
|
$
0.47
|
|
|
Less – Discontinued
Operations (Gain) Loss, Net of Taxes
|
|
—
|
|
—
|
|
0.08
|
|
|
Net Earnings (Loss)
from Continuing Operations
|
|
0.42
|
|
1.41
|
|
0.55
|
|
|
Add Back –
Non-Operating Pension Expense (Income)
|
|
(0.03)
|
|
(0.02)
|
|
0.04
|
|
|
Add Back – Net Special
Items Expense (Income)
|
|
0.33
|
|
0.14
|
|
0.08
|
|
|
Income Taxes -
Non-Operating Pension and Special Items
|
|
(0.28)
|
|
(0.98)
|
|
(0.03)
|
|
|
Adjusted Operating
Earnings Per Share*
|
|
$
0.44
|
|
$
0.55
|
|
$
0.64
|
|
|
|
|
*
|
Adjusted operating
earnings per share (non-GAAP) is defined as net earnings (loss) per
share (GAAP) excluding the per share impact of discontinued
operations, net special items and non-operating pension expense
(income). Diluted earnings (loss) per share is the most directly
comparable GAAP measure. Management uses this measure to focus on
on-going operations, and believes that such measure is useful to
investors in assessing the operational performance of the Company
and enabling investors to perform meaningful comparisons of past
and present consolidated operating results from continuing
operations. For discussion of discontinued operations, net special
items and non-operating pension expense (income), see the
disclosure under Effects of Net Special Items, Discontinued
Operations, Net of Taxes and Consolidated Statement of Operations
and related notes included later in this release. A reconciliation
of net earnings (loss) to adjusted operating earnings and diluted
earnings (loss) per share to adjusted operating earnings per share,
and an explanation of why we believe these non-GAAP financial
measures provide useful information to investors, are included
later in this release.
|
|
Select Financial
Measures
|
|
|
|
|
(In
millions)
|
|
Third
Quarter
2024
|
|
Second
Quarter
2024
|
|
Third
Quarter
2023
|
|
|
Net Sales
|
|
$
4,686
|
|
$
4,734
|
|
$
4,613
|
|
|
Net Earnings
(Loss)
|
|
150
|
|
498
|
|
165
|
|
|
Adjusted
Operating Earnings
|
|
153
|
|
193
|
|
224
|
|
|
Cash Provided By (Used
For) Operations
|
|
521
|
|
365
|
|
468
|
|
|
Free Cash
Flow**
|
|
309
|
|
167
|
|
240
|
|
|
|
|
**
|
Free cash flow is a
non-GAAP financial measure, which equals cash provided by
operations less cash invested in capital projects. The most
directly comparable GAAP measure is cash provided by (used for)
operations. A reconciliation of cash provided by (used for)
operations to free cash flow and an explanation of why we believe
this non-GAAP financial measure provides useful information to
investors, are included later in this release.
|
SEGMENT INFORMATION
The following table presents net
sales and business segment operating profit (loss), which is the
Company's measure of segment profitability. Business segment
operating profit (loss) is a measure reported to our management for
purposes of making decisions about allocating resources to our
business segments and assessing the performance of our business
segments and is presented in our financial statement footnotes in
accordance with ASC 280 - "Segment Reporting". Third quarter 2024
net sales by business segment and operating profit (loss) by
business segment compared with the second quarter of 2024 and the
third quarter of 2023 are as follows:
|
Business Segment
Results
|
|
|
|
|
(In
millions)
|
|
Third
Quarter
2024
|
|
Second
Quarter
2024
|
|
Third
Quarter
2023
|
|
|
Net Sales by
Business Segment
|
|
|
|
|
|
|
|
|
Industrial
Packaging
|
|
$
3,926
|
|
$
3,931
|
|
$
3,787
|
|
|
Global Cellulose
Fibers
|
|
710
|
|
717
|
|
725
|
|
|
Corporate and
Inter-segment Sales
|
|
50
|
|
86
|
|
101
|
|
|
Net
Sales
|
|
$
4,686
|
|
$
4,734
|
|
$
4,613
|
|
|
Business Segment
Operating Profit (Loss)
|
|
|
|
|
|
|
|
|
Industrial
Packaging
|
|
$
197
|
|
$
291
|
|
$
325
|
|
|
Global Cellulose
Fibers
|
|
40
|
|
31
|
|
27
|
|
Industrial Packaging business segment operating
profit (loss) in the third quarter of 2024 was $197 million compared with $291 million in the second quarter of 2024. In
North America, business segment
operating profit (loss) decreased as higher sales prices for boxes
and containerboard were more than offset by seasonally lower sales
volumes, higher operating costs and higher planned outage costs.
Sales volumes were also impacted by one less shipping day in the
third quarter of 2024. Operating costs were negatively impacted by
lower volumes, reliability incidents and spending, seasonally
higher labor and employee benefit costs. Input costs were higher,
driven by higher energy and wood costs. Business segment operating
profit (loss) benefited from the receipt of an insurance
reimbursement related to the Ixtac, Mexico box plant fire that occurred in the
first quarter of 2024. In EMEA Packaging, business segment
operating profit (loss) was lower driven by seasonally lower
volumes and higher input costs partially offset by lower planned
outage costs and operating costs.
Global Cellulose Fibers business segment operating profit
(loss) in the third quarter of 2024 was $40
million compared with $31
million in the second quarter of 2024. The improvement of
business segment operating profit (loss) reflected higher average
sales prices for both fluff and paper and tissue grade pulp and
lower planned outage costs. Lower sales volumes for commodity pulp
were mostly offset by higher fluff pulp volume. Operating costs
were higher, driven by mill reliability incidents, employee
benefits costs and the timing of spending. Input costs were stable
as lower energy and chemical costs were offset by higher wood
costs.
EFFECTS OF SPECIAL ITEMS
Net special items include
items considered by management to not be reflective of the
Company's underlying operations. Net special items in the third
quarter of 2024 amount to a net after-tax charge of $12 million ($0.04
per diluted share) compared with a benefit of $297 million ($0.84
per diluted share) in the second quarter of 2024 and a charge of
$22 million ($0.06 per diluted share) in the third quarter of
2023. Net special items in all periods include the following
charges (benefits):
|
|
Third Quarter
2024
|
|
Second Quarter
2024
|
|
Third Quarter
2023
|
|
|
(In
millions)
|
|
Before
Tax
|
|
After
Tax
|
|
Before
Tax
|
|
After
Tax
|
|
Before
Tax
|
|
After
Tax
|
|
|
Restructuring and
other charges, net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
costs
|
|
$
56
|
|
$
42
|
(a)
|
$
—
|
|
$
—
|
|
$
—
|
|
$
—
|
|
|
Total restructuring
and other charges, net
|
|
56
|
|
42
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Environmental
remediation adjustment
|
|
—
|
|
—
|
|
25
|
|
19
|
(f)
|
29
|
|
22
|
(h)
|
|
DS Smith combination
costs
|
|
26
|
|
26
|
(b)
|
17
|
|
17
|
(b)
|
—
|
|
—
|
|
|
Strategic advisory
fees
|
|
25
|
|
19
|
(b)
|
12
|
|
9
|
(b)
|
—
|
|
—
|
|
|
Italy
antitrust
|
|
(6)
|
|
(6)
|
(c)
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Third-party warehouse
fire
|
|
13
|
|
9
|
(d)
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Net (gain) loss on
miscellaneous land sales
|
|
—
|
|
—
|
|
(5)
|
|
(4)
|
(g)
|
—
|
|
—
|
|
|
Interest related to
settlement of tax audits
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Tax benefit related to
internal legal entity restructuring
|
|
—
|
|
(78)
|
(e)
|
—
|
|
(338)
|
(e)
|
—
|
|
—
|
|
|
Tax benefit related to
settlement of tax audits
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Total special items,
net
|
|
$
114
|
|
$
12
|
|
$
49
|
|
$
(297)
|
|
$
29
|
|
$
22
|
|
|
|
|
(a)
|
Severance costs
associated with the Company's 80/20 strategic approach which
includes the realignment of resources.
|
|
(b)
|
Transaction related
costs that the Company believes are not reflective of the Company's
underlying operations.
|
|
(c)
|
Settlement associated
with an Italian antitrust matter initially recorded as a special
item in 2019.
|
|
(d)
|
The Company's cost for
third-party damages associated with a warehouse fire in
Morocco.
|
|
(e)
|
Tax benefit resulting
from internal legal entity restructuring.
|
|
(f)
|
Environmental
remediation adjustment associated with remediation work at a waste
pit site at a mill acquired but never operated by the Company and
last utilized by the predecessor owner of the mill.
|
|
(g)
|
(Gains) losses
recognized in connection with miscellaneous land sales that the
Company believes are not reflective of the Company's underlying
operations.
|
|
(h)
|
Environmental
remediation adjustment associated with remediation work at a
wastewater management unit at a mill that the Company divested in
1999.
|
EARNINGS WEBCAST
The company will host a webcast today
to discuss earnings and current market conditions, beginning at
10 a.m. ET (9
a.m. CT). All interested parties are invited to listen to
the webcast via the company's website by clicking on the Investors
tab and going to the Events & Presentations page at
https://www.internationalpaper.com/investors/events-presentations.
A replay of the webcast will also be on the website beginning
approximately two hours after the call.
Parties who wish to participate in the webcast via
teleconference may dial +1 (646) 307-1963 or, within the U.S. only,
(800) 715-9871, and ask to be connected to the International Paper
third quarter earnings call. The conference ID number is 3629265.
Participants should call in no later than 9:45 a.m. ET (8:45 a.m.
CT). An audio-only replay will be available for ninety days
following the call. To access the replay, dial +1 (609) 800-9909
or, within the U.S. only, (800) 770-2030 and when prompted for the
conference ID, enter 3629265.
About International Paper
International Paper (NYSE:
IP) is a global producer of sustainable packaging, pulp and other
fiber-based products, and one of the world's largest recyclers.
Headquartered in Memphis, Tenn.,
we employ approximately 39,000 colleagues globally who are
committed to creating what's next. We serve customers worldwide,
with manufacturing operations in North
America, Europe Latin America and North Africa. Net sales for 2023 were
$18.9 billion.
Visit https://www.internationalpaper.com/investors for more
information regarding International Paper, including a slide
presentation regarding the third quarter 2024. We use this website
as a primary channel for disclosing key information to our
investors, some of which may contain material and previously
non-public information.
Cautionary Statement Regarding Forward-Looking
Statements
Certain statements in this press release that are
not historical in nature may be considered "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995, as amended. Forward-looking statements can be
identified by the use of forward-looking or conditional words such
as "expects," "anticipates," "believes," "estimates," "could,"
"should," "can," "forecast," "intend," "look," "may," "will,"
"remain," "confident," "commit" and "plan" or similar expressions.
These statements are not guarantees of future performance and
reflect management's current views and speak only as to the dates
the statements are made and are subject to risks and uncertainties
that could cause actual results to differ materially from those
expressed or implied in these statements. All statements, other
than statements of historical fact, are forward-looking statements,
including, but not limited to, statements regarding anticipated
financial results, economic conditions, industry trends, future
prospects and the execution and consummation of corporate
transactions or contemplated acquisitions, including our proposed
business combination with DS Smith Plc. Factors which could cause
actual results to differ include but are not limited to: (i) our
ability to consummate and achieve the benefits expected from, and
other risks associated with, acquisitions, joint ventures,
divestitures, spinoffs, capital investments and other corporate
transactions, including, but not limited to, our proposed business
combination with DS Smith Plc and our ability to integrate and
implement our plans, forecasts, and other expectations with respect
to the combined company; (ii) uncertainty as to whether or when the
business combination may be completed, if at all; (iii) risks with
respect to climate change and global, regional, and local weather
conditions, as well as risks related to our targets and goals with
respect to climate change and the emission of greenhouse gases
(GHG) and other environmental, social and governance matters,
including our ability to meet such targets and goals; (iv) loss
contingencies and pending, threatened or future litigation,
including with respect to environmental related matters; (v) the
level of our indebtedness, risks associated with our variable rate
debt, and changes in interest rates (including the impact of
current elevated interest rate levels and the potential for ongoing
reductions in interest rates); (vi) the impact of global and
domestic economic conditions and industry conditions, including
with respect to current negative macroeconomic conditions,
inflationary pressures and changes in the cost or availability of
raw materials, energy sources and transportation sources, supply
chain shortages and disruptions, competition we face, cyclicality
and changes in consumer preferences, demand and pricing for our
products, and conditions impacting the credit, capital and
financial markets; (vii) risks arising from conducting business
internationally, domestic and global geopolitical conditions,
military conflict (including the Russia/Ukraine conflict, the conflict in the
Middle East, the further expansion
of such conflicts, and the geopolitical and economic consequences
associated therewith), changes in currency exchange rates, trade
protectionist policies and trade tensions, downgrades in our credit
ratings, and/or the credit ratings of banks issuing certain letters
of credit, issued by recognized credit rating organizations; (viii)
the amount of our future pension funding obligations, and pension
and healthcare costs; (ix) the costs of compliance, or the failure
to comply with, existing and new environmental (including with
respect to climate change and greenhouse gas emissions), tax, labor
and employment, privacy, anti-bribery and anti-corruption, and
other U.S. and non-U.S. governmental laws and regulations
(including but not limited to those in the United Kingdom and European Union); (x) any
material disruption at any of our manufacturing facilities or other
adverse impact on our operations due to severe weather, natural
disasters, climate change or other causes; (xi) our ability to
realize expected benefits and cost savings associated with
restructuring initiatives; (xii) cybersecurity and information
technology risks, including as a result of security breaches and
cybersecurity incidents; (xiii) our exposure to claims under our
agreements with Sylvamo Corporation; (xiv) our failure to realize
the anticipated benefits of the spin-off of Sylvamo Corporation and
the qualification of such spin-off as a tax-free transaction for
U.S. federal income tax purposes; (xv) risks associated with our
review of strategic options for our global cellulose fibers
business; and (xvi) our ability to attract and retain qualified
personnel. These and other factors that could cause or contribute
to actual results differing materially from such forward-looking
statements can be found in our press releases and reports filed
with the U.S. Securities and Exchange Commission. In addition,
other risks and uncertainties not presently known to the Company or
that we currently believe to be immaterial could affect the
accuracy of any forward-looking statements. The Company undertakes
no obligation to publicly update any forward-looking statements,
whether as a result of new information, future events or
otherwise.
|
INTERNATIONAL PAPER COMPANY
Consolidated Statement of Operations
Preliminary and
Unaudited
(In millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Three Months Ended
June 30
|
|
Nine Months Ended
September 30,
|
|
|
|
|
2024
|
|
2023
|
|
2024
|
|
2024
|
|
2023
|
|
|
Net Sales
|
|
$
4,686
|
|
$
4,613
|
|
$
4,734
|
|
$
14,039
|
|
$ 14,315
|
|
|
Costs and Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of products
sold
|
|
3,342
|
(a)
|
3,345
|
(h)
|
3,360
|
(a)
|
10,126
|
(a)
|
10,347
|
(h)
|
|
Selling and
administrative expenses
|
|
508
|
(b)
|
286
|
|
453
|
(b)
|
1,319
|
(b)
|
1,003
|
|
|
Depreciation and
amortization
|
|
267
|
|
258
|
|
261
|
|
806
|
(c)
|
743
|
|
|
Distribution
expenses
|
|
357
|
|
382
|
|
379
|
|
1,127
|
|
1,180
|
|
|
Taxes other than
payroll and income taxes
|
|
37
|
|
39
|
|
35
|
|
113
|
|
115
|
|
|
Restructuring and
other charges, net
|
|
56
|
(d)
|
—
|
|
—
|
|
59
|
(d)
|
—
|
|
|
Net (gains) losses on
sales of fixed assets
|
|
—
|
|
—
|
|
(5)
|
(e)
|
—
|
(e)
|
—
|
|
|
Interest expense,
net
|
|
51
|
|
58
|
|
55
|
|
152
|
(f)
|
179
|
(i)
|
|
Non-operating pension
expense (income)
|
|
(12)
|
|
13
|
|
(10)
|
|
(34)
|
|
40
|
|
|
Earnings (Loss) From Continuing Operations Before
Income Taxes and Equity Earnings (Loss)
|
|
80
|
|
232
|
|
206
|
|
371
|
|
708
|
|
|
Income tax provision
(benefit)
|
|
(71)
|
(g)
|
39
|
|
(293)
|
(g)
|
(337)
|
(g)
|
120
|
(j)
|
|
Equity earnings
(loss), net of taxes
|
|
(1)
|
|
(1)
|
|
(1)
|
|
(4)
|
|
(2)
|
|
|
Earnings (Loss) From Continuing
Operations
|
|
150
|
|
192
|
|
498
|
|
704
|
|
586
|
|
|
Discontinued
operations, net of taxes
|
|
—
|
|
(27)
|
(k)
|
—
|
|
—
|
|
(14)
|
(k)
|
|
Net Earnings (Loss)
|
|
$
150
|
|
$
165
|
|
$
498
|
|
$
704
|
|
$
572
|
|
|
Basic Earnings Per Common Share
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from
continuing operations
|
|
$
0.43
|
|
$
0.55
|
|
$
1.43
|
|
$
2.02
|
|
$
1.69
|
|
|
Discontinued
operations, net of taxes
|
|
—
|
|
(0.08)
|
|
—
|
|
—
|
|
(0.04)
|
|
|
Net earnings
(loss)
|
|
$
0.43
|
|
$
0.47
|
|
$
1.43
|
|
$
2.02
|
|
$
1.65
|
|
|
Diluted Earnings Per Common
Share
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from
continuing operations
|
|
$
0.42
|
|
$
0.55
|
|
$
1.41
|
|
$
1.99
|
|
$
1.68
|
|
|
Discontinued
operations, net of taxes
|
|
—
|
|
(0.08)
|
|
—
|
|
—
|
|
(0.04)
|
|
|
Net earnings
(loss)
|
|
$
0.42
|
|
$
0.47
|
|
$
1.41
|
|
$
1.99
|
|
$
1.64
|
|
|
Average Shares of Common Stock Outstanding -
Diluted
|
|
353.4
|
|
348.1
|
|
352.8
|
|
353.6
|
|
349.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes
are an integral part of this Consolidated Statement of
Operations.
|
|
(a)
|
Includes a pre-tax
charge of $13 million ($9 million after taxes) for the three months
and nine months ended September 30, 2024 for third-party damages
related to a warehouse fire in Morocco, pre-tax income of $6
million (before and after taxes) for the three months and nine
months ended September 30, 2024 related to the settlement of an
Italian antitrust fine, a pre-tax charge of $25 million ($19
million after taxes) for the three months ended June 30, 2024 and
the nine months ended September 30, 2024 for environmental
remediation adjustments and a pre-tax charge of $10 million ($7
million after taxes) for the nine months ended September 30, 2024
for a litigation reserve.
|
|
(b)
|
Includes pre-tax
charges of $26 million (before and after taxes), $17 million
(before and after taxes) and $48 million ($47 million after taxes)
for the three months ended September 30, 2024 and June 30, 2024 and
the nine months ended September 30, 2024, respectively, for costs
associated with our announced agreement of an all-share combination
with DS Smith Plc and pre-tax charges of $25 million ($19 million
after taxes), $12 million ($9 million after taxes) and $37 million
($28 million after taxes) for the three months ended September 30,
2024 and June 30, 2024 and the nine months ended September 30,
2024, respectively, for strategic advisory fees.
|
|
(c)
|
Includes a pre-tax
charge of $5 million ($4 million after taxes) for the nine months
ended September 30, 2024 for closure costs associated with the
permanent closure of our containerboard mill in Orange, Texas and
the permanent shutdown of pulp machines at our Riegelwood, North
Carolina and Pensacola, Florida mills.
|
|
(d)
|
Includes a pre-tax
charge of $56 million ($42 million after taxes) for the three
months and nine months ended September 30, 2024 for severance
related to our 80/20 strategic approach and a pre-tax charge of $3
million ($2 million after taxes) for the nine months ended
September 30, 2024 for costs associated with the permanent closure
of our containerboard mill in Orange, Texas and the permanent
shutdown of pulp machines at our Riegelwood, North Carolina and
Pensacola, Florida mills.
|
|
(e)
|
Includes a pre-tax net
gain of $5 million ($4 million after taxes) for the three months
ended June 30, 2024 and the nine months ended September 30, 2024
and a pre-tax net loss of $5 million ($4 million after taxes) for
the nine months ended September 30, 2024 related to miscellaneous
land sales.
|
|
(f)
|
Includes pre-tax income
of $10 million ($7 million after taxes) for the nine months ended
September 30, 2024 for interest income associated with the
settlement of tax audits.
|
|
(g)
|
Includes a tax benefit
of $78 million, $338 million and $416 million for the three months
ended September 30, 2024 and June 30, 2024 and the nine months
ended September 30, 2024, respectively, related to internal legal
entity restructuring.
|
|
(h)
|
Includes a pre-tax
charge of $29 million ($22 million after taxes) for the three
months and nine months ended September 30, 2023 for an
environmental remediation reserve adjustment.
|
|
(i)
|
Includes income of $6
million ($4 million after taxes) for the nine months ended
September 30, 2023 for interest income associated with the
settlement of tax audits and a pre-tax charge of $3 million ($2
million after taxes) for the nine months ended September 30, 2023
related to the previously announced settlement of the timber
monetization restructuring tax matter.
|
|
(j)
|
Includes a tax benefit
of $23 million for the nine months ended September 30, 2023 related
to the settlement of tax audits.
|
|
(k)
|
Includes charges of $59
million ($50 million after taxes) and $135 million ($126 million
after taxes) for the three months and nine months ended September
30, 2023, respectively, for impairment and transaction costs
related to our former equity method investment in the Ilim joint
venture.
|
|
INTERNATIONAL PAPER COMPANY
Reconciliation of Net Earnings (Loss) to Adjusted Operating
Earnings
Preliminary and Unaudited
(In millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Three Months
Ended
June 30
|
|
Nine Months Ended
September 30,
|
|
|
|
|
2024
|
|
2023
|
|
2024
|
|
2024
|
|
2023
|
|
|
Net Earnings (Loss)
|
|
$
150
|
|
$
165
|
|
$
498
|
|
$
704
|
|
$
572
|
|
|
Less: Discontinued
operations, net of taxes (gain) loss
|
|
—
|
|
27
|
|
—
|
|
—
|
|
14
|
|
|
Earnings (Loss) from Continuing
Operations
|
|
150
|
|
192
|
|
498
|
|
704
|
|
586
|
|
|
Add back: Non-operating
pension expense (income)
|
|
(12)
|
|
13
|
|
(10)
|
|
(34)
|
|
40
|
|
|
Add back: Net special
items expense (income)
|
|
114
|
|
29
|
|
49
|
|
181
|
|
26
|
|
|
Income taxes -
Non-operating pension and special items
|
|
(99)
|
|
(10)
|
|
(344)
|
|
(444)
|
|
(39)
|
|
|
Adjusted Operating Earnings
|
|
$
153
|
|
$
224
|
|
$
193
|
|
$
407
|
|
$
613
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Three Months
Ended
June 30
|
|
Nine Months Ended
September 30,
|
|
|
|
|
2024
|
|
2023
|
|
2024
|
|
2024
|
|
2023
|
|
|
Diluted Earnings per Common Share as
Reported
|
|
$
0.42
|
|
$
0.47
|
|
$
1.41
|
|
$
1.99
|
|
$ 1.64
|
|
|
Less: Discontinued
operations, net of taxes (gain) loss
|
|
—
|
|
0.08
|
|
—
|
|
—
|
|
0.04
|
|
|
Continuing Operations
|
|
0.42
|
|
0.55
|
|
1.41
|
|
1.99
|
|
1.68
|
|
|
Add back: Non-operating
pension expense (income)
|
|
(0.03)
|
|
0.04
|
|
(0.02)
|
|
(0.09)
|
|
0.11
|
|
|
Add back: Net special
items expense (income)
|
|
0.33
|
|
0.08
|
|
0.14
|
|
0.51
|
|
0.07
|
|
|
Income taxes per share
- Non-operating pension and special items
|
|
(0.28)
|
|
(0.03)
|
|
(0.98)
|
|
(1.26)
|
|
(0.10)
|
|
|
Adjusted Operating Earnings per
Share
|
|
$
0.44
|
|
$
0.64
|
|
$
0.55
|
|
$
1.15
|
|
$ 1.76
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
Earnings and Adjusted Operating Earnings Per Share are non-GAAP
measures defined as net earnings (loss) (a GAAP measure) excluding
discontinued operations, net special items and non-operating
pension expense (income). Net earnings (loss) and Diluted earnings
(loss) per share are the most directly comparable GAAP measures.
The Company calculates Adjusted Operating Earnings (non-GAAP) by
excluding the after-tax effect of discontinued operations,
non-operating pension expense (income) and net special items, as
described in greater detail above, from the net earnings (loss)
reported under U.S. GAAP. Adjusted Operating Earnings Per Share is
calculated by dividing Adjusted Operating Earnings by the diluted
average shares of common stock outstanding. Management uses these
non-GAAP measures to focus on on-going operations, and believes
that such non-GAAP measures are useful to investors in assessing
the operational performance of the Company and enabling investors
to perform meaningful comparisons of past and present consolidated
operating results from continuing operations. The Company believes
that using these non-GAAP measures, along with the most directly
comparable GAAP measures, provides for a more complete analysis of
the Company's results of operations.
|
|
|
|
Non-operating pension
expense (income) represents amortization of prior service cost,
amortization of actuarial gains/losses, expected return on assets
and interest cost. The Company excludes these amounts from Adjusted
Operating Earnings as the Company does not believe these items
reflect ongoing operations. These particular pension cost elements
are not directly attributable to current employee service. The
Company includes service cost in our non-GAAP measure as it is
directly attributable to employee service, and the corresponding
employees' compensation elements, in connection with ongoing
operations.
|
|
|
|
Since diluted earnings
per share are computed independently for each period, nine-month
per share amounts may not equal the sum of respective
quarters.
|
|
INTERNATIONAL PAPER COMPANY
Consolidated Balance Sheet
Preliminary and
Unaudited
(In millions)
|
|
September 30, 2024
|
|
December 31, 2023
|
|
Assets
|
|
|
|
|
Current Assets
|
|
|
|
|
Cash and Temporary
Investments
|
$
1,159
|
|
$
1,113
|
|
Accounts and Notes
Receivable, Net
|
3,116
|
|
3,059
|
|
Contract
Assets
|
434
|
|
433
|
|
Inventories
|
1,795
|
|
1,889
|
|
Other
|
139
|
|
114
|
|
Total Current
Assets
|
6,643
|
|
6,608
|
|
Plants, Properties and
Equipment, Net
|
9,960
|
|
10,150
|
|
Investments
|
161
|
|
163
|
|
Long-Term Financial
Assets of Variable Interest Entities
|
2,326
|
|
2,312
|
|
Goodwill
|
3,038
|
|
3,041
|
|
Overfunded Pension Plan
Assets
|
197
|
|
118
|
|
Right of Use
Assets
|
438
|
|
448
|
|
Deferred Charges and
Other Assets
|
398
|
|
421
|
|
Total Assets
|
$
23,161
|
|
$
23,261
|
|
Liabilities and Equity
|
|
|
|
|
Current Liabilities
|
|
|
|
|
Notes Payable and
Current Maturities of Long-Term Debt
|
259
|
|
138
|
|
Accounts Payable and
Other Current Liabilities
|
4,094
|
|
3,821
|
|
Total Current
Liabilities
|
4,353
|
|
3,959
|
|
Long-Term
Debt
|
5,307
|
|
5,455
|
|
Long-Term Nonrecourse
Financial Liabilities of Variable Interest Entities
|
2,118
|
|
2,113
|
|
Deferred Income
Taxes
|
957
|
|
1,552
|
|
Underfunded Pension
Benefit Obligation
|
247
|
|
280
|
|
Postretirement and
Postemployment Benefit Obligation
|
126
|
|
140
|
|
Long-Term Lease
Obligations
|
295
|
|
312
|
|
Other
Liabilities
|
1,129
|
|
1,095
|
|
Equity
|
|
|
|
|
Common
Stock
|
449
|
|
449
|
|
Paid-in
Capital
|
4,710
|
|
4,730
|
|
Retained
Earnings
|
9,705
|
|
9,491
|
|
Accumulated Other
Comprehensive Loss
|
(1,554)
|
|
(1,565)
|
|
13,310
|
|
13,105
|
|
Less: Common Stock
Held in Treasury, at Cost
|
4,681
|
|
4,750
|
|
Total
Equity
|
8,629
|
|
8,355
|
|
Total Liabilities and Equity
|
$
23,161
|
|
$
23,261
|
|
|
|
|
|
INTERNATIONAL PAPER COMPANY
Consolidated Statement of Cash Flows
Preliminary and
Unaudited
(In millions)
|
|
Nine Months Ended September 30,
|
|
2024
|
|
2023
|
|
Operating Activities
|
|
|
|
|
Net earnings
(loss)
|
$
704
|
|
$
572
|
|
Depreciation and
amortization
|
806
|
|
743
|
|
Deferred income tax
expense (benefit), net
|
(606)
|
|
(47)
|
|
Restructuring and
other charges, net
|
59
|
|
—
|
|
Net (gains) losses on
sales and impairments of equity method investments
|
—
|
|
135
|
|
Equity method
dividends received
|
—
|
|
13
|
|
Equity (earnings)
losses, net of taxes
|
4
|
|
(109)
|
|
Periodic pension
(income) expense, net
|
(1)
|
|
70
|
|
Other, net
|
99
|
|
36
|
|
Changes in current
assets and liabilities
|
|
|
|
|
Accounts and notes
receivable
|
(79)
|
|
201
|
|
Contract
assets
|
(1)
|
|
7
|
|
Inventories
|
49
|
|
62
|
|
Accounts payable and
accrued liabilities
|
233
|
|
(332)
|
|
Interest
payable
|
24
|
|
(5)
|
|
Other
|
(10)
|
|
(5)
|
|
Cash Provided By (Used For) Operating
Activities
|
1,281
|
|
1,341
|
|
Investment Activities
|
|
|
|
|
Invested in capital
projects
|
(661)
|
|
(836)
|
|
Proceeds from sale of
equity method investments, net of transaction costs
|
—
|
|
472
|
|
Proceeds from
insurance recoveries
|
25
|
|
—
|
|
Proceeds from sale of
fixed assets
|
5
|
|
4
|
|
Other
|
(3)
|
|
2
|
|
Cash Provided By (Used For) Investment
Activities
|
(634)
|
|
(358)
|
|
Financing Activities
|
|
|
|
|
Repurchases of common
stock and payments of restricted stock tax withholding
|
(22)
|
|
(218)
|
|
Issuance of
debt
|
—
|
|
772
|
|
Reduction of
debt
|
(33)
|
|
(689)
|
|
Change in book
overdrafts
|
(51)
|
|
(26)
|
|
Dividends
paid
|
(482)
|
|
(482)
|
|
Other
|
—
|
|
(1)
|
|
Cash Provided By (Used for) Financing
Activities
|
(588)
|
|
(644)
|
|
Effect of Exchange Rate Changes on Cash and Temporary
Investments
|
(13)
|
|
6
|
|
Change in Cash and Temporary
Investments
|
46
|
|
345
|
|
Cash and Temporary Investments
|
|
|
|
|
Beginning of the
period
|
1,113
|
|
804
|
|
End of the
period
|
$
1,159
|
|
$
1,149
|
|
|
|
|
|
INTERNATIONAL PAPER COMPANY
Reconciliation of Cash Provided by Operations to Free Cash
Flow
Preliminary and Unaudited
(In millions)
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
|
|
Cash Provided By (Used For) Operating
Activities
|
$
521
|
|
$
468
|
|
$
1,281
|
|
$
1,341
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Cash invested in
capital projects
|
(212)
|
|
(228)
|
|
(661)
|
|
(836)
|
|
|
|
Free Cash Flow
|
$
309
|
|
$
240
|
|
$
620
|
|
$
505
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow is a
non-GAAP measure which equals cash provided by (used for) operating
activities less cash invested in capital projects, and the most
directly comparable GAAP measure is cash provided by operations.
Management utilizes this measure in connection with managing our
business and believes that free cash flow is useful to investors as
a liquidity measure because it measures the amount of cash
generated that is available, after reinvesting in the business, to
maintain a strong balance sheet, pay dividends, repurchase stock,
service debt and make investments for future growth. It should not
be inferred that the entire free cash flow amount is available for
discretionary expenditures.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The non-GAAP financial
measures presented in this release have limitations as analytical
tools and should not be considered in isolation or as a substitute
for an analysis of our results calculated in accordance with GAAP.
In addition, because not all companies use identical calculations,
the Company's presentation of non-GAAP measures in this release may
not be comparable to similarly titled measures disclosed by other
companies, including companies in the same industry as
International Paper.
|
|
|
|
|
|
|
|
|
|
Management believes
non-GAAP financial measures, when used in conjunction with
information presented in accordance with GAAP, can facilitate a
better understanding of the impact of various factors and trends on
the Company's financial results. Management also uses these
non-GAAP financial measures in making financial, operating and
planning decisions and in evaluating the Company's performance.
Investors are cautioned to not place undue reliance on any non-GAAP
financial measures used in this release.
|
|
|
View original
content:https://www.prnewswire.com/news-releases/international-paper-reports-third-quarter-2024-results-302292114.html
SOURCE International Paper
